Mary Cushing Doherty | July 31, 2024

Buying a House as an Unmarried Couple in Pennsylvania

In this blog, we'll explore important considerations including how to handle the house title, and the importance of hiring separate real estate lawyers or realtors. We’ll also delve into what happens if one partner already owns the house or if marriage comes into the picture after moving in.

House Title Considerations for Unmarried Couples

Deciding how to hold the home title to the property is a crucial when buying a house together. Unmarried couples buying a house must not assume their legal rights are similar to those of married couples. Failing to plan ahead will likely lead to unforeseen economic consequences. Pennsylvania law allows specific options for title to real estate owned by an unmarried couples:

Joint Tenancy with Right of Survivorship: This form of co-ownership grants equal shares to both partners, and if one partner passes away, the total ownership automatically passes to the surviving owner without going through probate. Therefore the couple should be aware that the survivor will retain full value and ownership. The heirs of the deceased owner cannot successfully gain a share of the value.
Tenants in Common: With this title, each partner can hold a specific percentage of ownership, which may or may not reflect their respective financial contributions. In the event of one partner's death, their percentage share will pass to their heirs or beneficiaries as directed by their will or Pennsylvania probate & estate laws. When the co-owners sell the property, if they have a disagreement, the proceeds will be divided by the percentage regardless of certain excess contributions.
Co-ownership Agreement: Drafting a co-ownership agreement is highly advisable, as it can clarify each partner's rights and responsibilities related to the property, including financial contributions and a clear plan for financial true-up (the process of correcting estimated or inaccurate amounts with actual up-to-date figures) and departure in the event of a breakup. This should be a detailed document tailored to the distinct expectations of each owner. By planning in advance, there is less likelihood of disputes later.

Separate Advisors to Protect Individual Interests

To protect each person's interests, it is wise for unmarried couples to consider hiring separate real estate lawyers. While it may seem convenient to use one legal advisor or realtor to buy the home, having independent advice ensures that each person's interests are adequately safeguarded.

Separate real estate lawyers can provide unbiased advice and negotiation strategies, reducing the potential for conflicts and misunderstandings between partners. If separate realtors are consulted a realtor may not be well versed in the legal consequences of the type of ownership selected.

One Partner Already Owns a House and the Other Moves In

If a person already owns a house and a partner moves in, there are a few considerations to keep in mind. Seeking counsel from a family lawyer is strongly advised.

Cohabitation Agreement: Creating a cohabitation agreement is a practical tool in this scenario. This document can outline the expectations and contributions of both partners during the period of cohabitation. The couple should discuss and agree on how expenses, such as mortgage payments, taxes, utilities, and maintenance costs, will be handled during the period of cohabitation.

If they each have personal property, they can address consequences in case of a breakup. The cohabitant- should be aware if there is no expectation of acquiring an interest in the real estate.

Getting Married After Moving Into the House

If a couple decides to get married after moving into the house, they should get advice before signing a new deed transferring a separately owned house to joint names. This will change ownership from pre-marital to marital property. This will impact how the property is divided in the event of a divorce. If they had a joint property before marriage, they should get advice about updating the ownership or their co-ownership agreement.
To address this situation, consider the following:

a. Prenuptial Agreement: Couples can create a prenuptial agreement to enter marriage based on communication and planning jointly for success. This legal document can specify how the property will be divided in the event of all future events such as sale, disability, death, divorce, to protect the interests of each person as well as other potential heirs.

b. Update Home Title and Ownership: After marriage, you may choose to update the title to reflect the change in circumstances and ownership as noted above. Advice about the consequences will avoid misunderstanding.

Consult with a family attorney to consider your best options

Buying a house together as an unmarried couple in Pennsylvania is an exciting venture, but it comes with its own set of considerations and potential conflicts. Many couples know that a married couple may ask for equitable distribution of the value of jointly owned property if they decide to split up. This will not apply to the unmarried couple.

By carefully deciding on the title, considering separate lawyers or realtors for each partner, and addressing scenarios like one partner already owning a house or getting married after moving in, you can lay a solid foundation for a successful homeownership journey.
To navigate these complexities and protect your individual interests, it is important to consult with an experienced family attorney familiar with real estate and consequences if the couple separates. The legal advisor can guide you through the legal aspects and tailor solutions that best suit your unique circumstances.

Our law firm has offices in Doylestown, Norristown, and Wayne, PA. We have the experience to help you with familial real estate concerns.

High Swartz | July 16, 2024

Commercial Property Laws

Commercial Property Laws in PA - Avoiding Legal Issues

Pennsylvania commercial property laws are strict, whether leasing or owning. Our commercial real estate attorneys can help you avoid legal pitfalls.

Purchasing Commercial Property in Pennsylvania

Let's start with this simple fact. Pennsylvania doesn't mandate a lawyer when buying or selling a commercial property. However, owing to their complexity, a commercial property lawyer is valuable for due diligence and compliance with state laws.

Commercial real estate law requires detailed legal documents. Purchasing a commercial property also requires investing money. Hiring a real estate lawyer can support due diligence on various aspects of the purchase.

Most importantly, they can review the purchase agreement to ensure compliance with local and state regulations. They can also perform title searches and review zoning laws. Legal representation can help identify and mitigate potential risks, negotiate terms, and handle the closing process more effectively.

Our real estate attorneys address commercial laws and residential legal concerns. They focus on metropolitan Philadelphia while supporting clients in Bucks, Delaware, and Montgomery County, PA.

Real estate laws can vary based on your location. So consult with an attorney familiar with potential legal nuances in your area.

Is Pennsylvania a Full Disclosure State for Commercial Property?

With residential real estate in PA, sellers must disclose known material defects of a real property.

However, commercial property transactions operate under the "caveat emptor" principle or buyer beware. The burden generally falls on the buyer to discover property issues.

Based on commercial property laws, sellers don't have to disclose defects. However, they cannot misrepresent the property's condition or engage in deception.

This issue underscores the value of having an experienced commercial real estate attorney. A lawyer can also protect your interests throughout the buying process.

Purchasing Commercial Property in Pennsylvania

Commercial real estate transactions in Pennsylvania involve several critical legal steps to ensure compliance and protect your investment.

One legal consideration is a comprehensive title search. It will uncover any title defects or encumbrances affecting your ownership rights.

Another is an environmental assessment. Meeting state and federal regulations is mandatory, especially in areas prone to industrial contamination.

Leasing Commercial Properties

In Pennsylvania, commercial leases must adhere to specific laws governing the terms and conditions of rental agreements. The lease agreement between the parties primarily defines these terms.

Unlike residential leases, which are governed by the Landlord and Tenant Act of 1951, commercial leases rely on contract law principles.

Potential Legal Issues Surrounding Commercial Properties

The last thing you need with a commercial property, whether you own or lease it, is litigation. Violations can include everything from zoning disputes to rent escalation.

These are some essential considerations in light of Pennsylvania commercial property laws.

Zoning Laws

In Pennsylvania, zoning laws determine how you can use a property. Municipalities enact those laws through the Pennsylvania Municipalities Planning Code. Zoning laws can also extend beyond the code. Most significantly, they can vary from one locality to another.

Zoning governs land use, building heights, density, and the type of buildings allowed on commercial property. They can also specify requirements for parking, signs, and the percentage of the land a building may cover.

Understanding an area's commercial property laws for zoning is essential for potential buyers or developers. Non-compliance can result in costly legal disputes and fines. In the worst case, you may be unable to use the property.

Working with a commercial property lawyer near you who is familiar with local zoning laws is worth the investment.

Title Searches on Commercial Properties

A title search confirms the seller's right to sell the property. It also uncovers title issues, including:

Property disputes
False documents
False identities
Estate issues
Property liens
Code violations

Title searches help prevent future disputes over ownership. They also ensure you receive a clear title. A real estate attorney or a title company can conduct a title search to find issues.

You can get title insurance to protect against losses from property title issues. Unlike home purchases involving a mortgage, insurance isn't mandatory.

Environmental Regulations

Environmental regulations in Pennsylvania play a significant role in commercial property law. Their enforcement protects the environment and ensures public health and safety.

In particular, two pieces of legislation impact commercial properties in Pennsylvania.

The first is the Pennsylvania Clean Streams Law. It regulates the discharge of pollutants into state waters.

The second is the Pennsylvania Solid Waste Management Act. It governs waste treatment and disposal.

Before purchasing a commercial property, you should conduct an environmental assessment. Although not legally required, it affords liability protection.

The assessment, often called a Phase I Environmental Site Assessment, helps identify potential contamination from hazardous substances or petroleum products. Depending on the findings, a more detailed investigation (Phase II) may be necessary.

Failure to comply with environmental regulations can lead to substantial liabilities, including fines and even a loss of property value.

ADA Compliance and Commercial Property Law

Compliance with the Americans with Disabilities Act (ADA) is crucial for commercial properties to ensure accessibility for individuals with disabilities. Compliance includes entrances, restrooms, and parking facilities.

In Pennsylvania, the ADA prohibits private employers with 15 or more employees from discrimination. However, federal laws have no size requirements.

Federal laws allow for fines of up to $75,000 for a first offense. Ongoing non-compliance can lead to additional, more costly penalties.

Property Taxes on Commercial Properties

Property taxes can be a significant cost for commercial real estate owners in PA. They reflect the property's assessed value and can influence leasing rates and investment decisions.

For example, high property taxes might mean higher lease rates, making it more difficult to attract tenants. Property owners can challenge high assessments through appeals to potentially lower their tax liabilities, thereby improving their investment returns.

Commercial Property Law and Financing

In Pennsylvania, you can structure financing for commercial properties using various methods. Each caters to different types of investments and investor needs. An experienced commercial property lawyer working with financial advisors can help determine the best option.

Here's an overview of the most common forms of financing for commercial real estate in the state:

Traditional Mortgages

Traditional mortgages are the most straightforward and commonly used financing for commercial properties. You can access these loans from banks, credit unions, or private lenders. Commercial mortgages generally have terms ranging from 5 to 20 years.

SBA Loans

The Small Business Administration (SBA) offers several loan programs for purchasing or improving commercial properties.

The SBA 504 loan allows long-term, fixed-rate financing for significant fixed assets like land and buildings. You can also use the SBA 7(a) loan program for smaller real estate purchases, but it comes with variable rates.

Bridge Loans

Bridge loans are a short-term financing option. As the name implies, they "bridge" the gap between immediate needs and longer-term financing solutions.

Bridge loans are valuable for buyers needing to move quickly on a purchase before their current property sells. Bridge loans have higher interest rates with shorter terms, typically six months to three years.

Mezzanine Loans

Mezzanine financing is a hybrid of debt and equity financing. If the business doesn't repay the loan on time and in full, the lender can convert it to an equity interest. Because of that risk, you might want to consult with a commercial real estate attorney.

This financing focuses on projects requiring more significant amounts than available through traditional loans. Mezzanine loads often facilitate large-scale developments or acquisitions.

Hard Money Loans

Hard money loans are another alternative, especially for investors looking for quick approvals and funding. The property secures the loan with terms much shorter than traditional mortgages. However, interest rates are higher. Investors often use hard money loans to renovate or reposition a commercial property quickly.

Experienced Commercial Real Estate Attorneys Near You

Our commercial real estate attorneys represent buyers and sellers in metropolitan Philadelphia and surrounding Bucks, Delaware, and Montgomery County. Commercial property laws, particularly zoning, may vary by location.

U.S. News recognized High Swartz as a Tier 1 firm in its Best Law Firm rankings. Best Lawyers in America© also cited several of our firm's real estate attorneys in its 2024 edition.

Sean G. Livesey | July 16, 2024

Property Tax Protest

Property Tax Protest: 5 Reasons to Consider an Appeal

Property tax assessments are critical components of real estate ownership. They impact both commercial and residential property owners. While necessary, they aren't always correct, opening the opportunity for a property tax protest.

If your tax assessment is out of line, you should consider submitting an appeal to ensure fairness in property valuation. You should also consider consulting a real estate attorney near you to help with the tax appeal protest.

High Swartz attorneys serve residential and commercial clients in Bucks, Delaware, and Montgomery County, PA.

Understanding Property Tax Assessments

In Pennsylvania, several entities assess property tax rates, such as counties, municipalities, and local taxing authorities like school districts. Consequently, property tax levies vary according to your address.

Your PA county tax assessor is the primary resource for understanding local property taxes and valuation. Moreover, how much you'll pay on the assessed fair market value varies by county. PA property taxes reflect the estimated value of your home. Discrepancies in estimated value often lead to property tax protests.

Mill Rates

Mill rates reflect the total value of property within your jurisdiction. They provide tax revenue to cover projected expenses in our jurisdiction's infrastructure, including items like police and emergency services and public schools.

The millage rate determines what you pay for Pennsylvania property taxes. Your property tax equals your property's estimated value times the millage rate. Mill rates often vary for different property types, such as residential, commercial, or industrial properties.

Because real estate values fluctuate, tax assessors typically update a property's taxable value annually. However, one consistent aspect in the Commonwealth is that one million represents $1 for every $1,000 assessed value.

Calculating Your Assessed Value

The calculation formula is Property tax levied on property = (mill rate x taxable property value) ÷ 1,000.

So, let's assume your mill rate is 7, and your residence has a taxable value of $150,000. Based on the formula, your tax bill is $1,050. So, $150,000 times 7 equals $1,050,000, then divide that by 7, and you get $1,050.

But here's the thing: assessments aren't infallible, and errors can happen. Plus, market values can shift, making your tax bill seem exorbitant. Hence, you have the option of filing a property tax protest.

5 Reasons to Consider a Property Tax Protest

Tax appeals ensure you don't pay an inflated tax bill. Whether you own residential or commercial property, there are compelling reasons to examine your assessment.

Here are five reasons you might want to consider a property tax protest:

1. Property Values Can Be Overvalued

It's not uncommon for commercial and residential property to reflect an overvalued assessment. It can stem from outdated assessment techniques or changes in property market values.

It's a good idea to use a third-party assessor to determine the value of your home. For example, a real estate agent can help you determine whether the assessment is fair. Their analysis can illuminate whether contesting an assessment is worth the time and expense.

2. Property Descriptions Can Have Inaccuracies

Sometimes, asses rs record information incorrectly. For example, the description of a property, its size, number of rooms, or even its usage isn't accurate.

For example, get a copy of your tax records and review it for some of the following:

Is your home correctly classified as residential property?
Is the size of your home and the lot accurate?
Is the number of bedrooms and bathrooms correct?
Are defects in your home, such as a leaky basement or an aging roof, mentioned?
Is the age of your home accurately stated, and is the purchase price accurate?

3. Comparable Value Discrepancies are Grounds for a Property Tax Protest

If a property like yours receives a lower assessment, you might have a case for a property tax protest. For example, find several homes of similar age and square footage. Then, see how their assessments align with yours.

Search in your area for recent sale prices of homes similar to yours on a website such as Zillow.com or Realtor.com. Any sales in the past few months may have occurred after your assessor's latest property evaluation.

4. Economic Hardships

Events like regional economic downturns, pandemics, or natural disasters can affect property values. It's only fair that tax assessments reflect these changes.

5. Legal Changes

Tax laws evolve, so staying updated can reveal new exemptions or reductions applicable to your property type. Again, that's where a real estate lawyer can be a valuable resource.

How to File a Property Tax Protest

Most Pennsylvania counties have appeal deadlines 202 between late July and September 1. However, Philadelphia extends its deadline until October 2, 2023.

You can file an appeal with the appeal board via email or online, though this route may not be available in all counties. It's best to check with the specific county's Board of Assessment Appeals for their preferred filing method. More details are available from the Department of Revenue. You can file your appeal form here if you're living in Philadelphia.

One widespread myth is that challenging assessments will inevitably lead to higher taxes. This concern is only sometimes valid—presenting a solid case backed by evidence can lead to a reduction instead.

By the way, if you're transferring a commercial or residential property, you'll want to familiarize yourself with transfer taxes. For example, Philadelphia's transfer tax is among the highest in Pennsylvania.

The Importance of a Real Estate Attorney

You don't need a real estate attorney to file a property tax protest. However, the process requires experience to navigate the legal intricacies and address essential details for your tax appeal.

A local real estate attorney has valuable insights into real estate law. Additionally, they can simplify the process and reduce the risk of overlooking critical elements, significantly increasing the chances of a successful appeal.

Before meeting with an attorney, you'll need to document the current value of your property and its assessed value.

Our law firm serves clients in Bucks, Delaware, and Montgomery County, PA. Best Law Firms recognized in their 2024 edition for real estate law in Philadelphia. So, if you're ready to challenge your property tax assessments, call us.

High Swartz | May 9, 2024

High Swartz LLP Welcomes Commercial Real Estate Partner Michael J. Stutman, Esq.

High Swartz LLP is pleased to welcome partner Michael J. Stutman to the firm. Michael brings extensive experience to the firm’s commercial real estate and business law practice areas. His clients include real estate developers, businesses, property owners, and real estate investors, whom he advises on all aspects of commercial transactions in the Philadelphia metropolitan area.

With a focus on property acquisition, ownership, and operation, Michael helps his clients navigate through the intricacies of real estate development, vendor relationships, and property management. He is adept at negotiating commercial leases for various real estate spaces including retail, office, shopping centers, restaurants, and industrial sites.

“A firm’s culture permeates all aspects of the practice, both internally and how the lawyers and staff interact with clients. I have sensed only kindness and professionalism from everyone at High Swartz. This kindness and professionalism drew me in. I look forward to a long and mutually rewarding relationship with the firm," says Michael.

Michael's experience extends beyond real estate, covering a wide range of general business matters. He provides strategic guidance in mergers and acquisitions, business sales, joint ventures, business contracts, entity selection and formation, and financing arrangements to clients throughout the Philadelphia region. He is also well-versed in assisting clients in securing grants, loans, and tax credits, enhancing their financial strategies.

High Swartz | October 9, 2023

Property Tax Appeal in PA

Property tax assessments are critical components of real estate ownership. They impact both commercial and residential property owners. And while they are necessary, they aren't always correct and subject to a property tax appeal.

You should consider filing an appeal if your tax assessment is out of line. It ensures fairness in property valuation. Consider talking with a real estate attorney near you to help with the tax appeal process.

High Swartz attorneys serve residential and commercial clients in Montgomery County and Bucks County.

Understanding Property Tax Assessments

In Pennsylvania, several sources assess property tax rates -- counties, municipalities, and local taxing authorities like school districts. Consequently, property tax levies vary according to your address.

Your PA county tax assessor is the primary resource for understanding local property taxes and valuation. Moreover, how much you'll pay on the assessed fair market value varies by county. Nonetheless, all PA property taxes reflect the assessed value of your home.

Mill Rates

Mill rates reflect the total value of property within your jurisdiction. They provide tax revenue to cover projected expenses in your jurisdiction's infrastructure. That includes items like police and emergency services and public schools.

The millage rate determines what you pay for Pennsylvania property taxes. Your property tax equals your property's assessed value times the millage rate. Mill rates frequently vary for different property types, such as residential, commercial, or industrial properties. So, you may consider filing a property tax appeal if your property is incorrectly recorded.

Because real estate values fluctuate, tax assessors typically update the property's taxable value yearly. However, one constant aspect in Commonwealth is that one mil represents $1 for every $1,000 assessed value.

Calculating Your Assessed Value

The formula is Property tax levied on property = (mill rate x taxable property value) ÷ 1,000.

But here's the thing: assessments aren't perfect, as errors can happen. Plus, market values can shift, making your tax bill seem exorbitant. Hence, you have the option of filing a property tax appeal.

5 Reasons to Consider a Property Tax Appeal

Tax appeals ensure you don't pay an inflated tax bill. There are compelling reasons to examine your assessment, whether you own residential or commercial property.

Here are five reasons you might want to consider a property tax appeal:

1. Property Value

It's not uncommon for commercial and residential property to reflect an over-valued assessment. That can stem from outdated assessment techniques or changes in property market values.

It's a good idea to use a third-party assessor to help determine the value of your home. For example, a real estate agent can help you determine whether the assessment is fair. Their analysis can illuminate whether or not contesting an assessment is worth the time and expense.

2. Inaccurate Property Descriptions

Sometimes, assessors record information incorrectly. For example, the description of a property, its size, number of rooms, or even its usage isn't accurate.

For example, get a copy of your tax records and review it for some of the following to determine if you should file a property tax appeal:

Is your home correctly classified as residential property?
Is the size of your home and the lot accurate?
Is the number of bedrooms and bathrooms correct?
Are defects in your home, such as a leaky basement or an aging roof, mentioned?
Is the age of your home accurately stated?
Is the purchase price accurate?

3. Comparable Values

If a property like yours receives a lower assessment, you might have a compelling case for an appeal. For example, find several homes of similar age and square footage. Then, see how their assessments align with yours.

4. Economic Hardships

Events like regional economic downturns, pandemics, or natural calamities can affect property values. It's only fair that tax assessments reflect these changes.

5. Legal Changes

Tax laws evolve, so staying updated can reveal new exemptions or reductions applicable to your property type. Again, that's where a real estate lawyer can be a valuable resource.

How to File a Property Tax Appeal

Most Pennsylvania counties have appeal deadlines 2023 between late July and September 1. However, Philadelphia extends its deadline until October 2, 2023.

You can file an appeal with the appeal board via email or online. More details are available from the Department of Revenue. You can file your appeal form here if you're living in Philadelphia.

One widespread myth is that challenging assessments will inevitably lead to higher taxes. This is only sometimes true -- presenting a solid case backed by evidence can lead to a reduction instead.

By the way, if you’re transferring a commercial or residential property, you’ll want to familiarize yourself with transfer taxes. For example, Philadelphia’s transfer tax is among the highest in Pennsylvania.

The Importance of a Real Estate Attorney for a Property Tax Appeal

You don't need to hire a real estate attorney to file a property tax appeal. However, the process requires expertise to navigate the legal intricacies and address essential details for your tax appeal.

A local real estate attorney owns valuable insights into real estate law. Additionally, they can simplify the process and reduce the risk of overlooking critical elements. As a result, they can significantly increase the chances of a successful appeal.

Before meeting with an attorney, you’ll need to document the current value of your property and its assessed value.

Our law firm serves clients in Montgomery County and Bucks County. Best Law Firms recognized in their 2023 edition for real estate law in Philadelphia. So, if you're ready to challenge your property tax assessments, call us.

High Swartz | August 8, 2023

Philadelphia Transfer Tax Update for 2023

You must be aware of the Philadelphia transfer tax if you're dealing with commercial, residential, or real estate development.

Post Updated: 8.8.2023

The state and the county impose a real estate transfer tax in Pennsylvania based on the property's location. So, you must familiarize yourself with Philadelphia's transfer tax to transfer property there. The buyer and seller typically split the tax burden and pay it after filing with the Record of Deeds Department.

You must pay that tax within 30 days of the transfer date. Otherwise, you'll incur additional charges. Equally important, if the Departments of Records or the Department of Revenue determines you attempt to bypass the tax, the tax assessment increases an extra 50% of the tax due.

Philadelphia's Transfer Tax is Among the Highest in Pennsylvania

The Commonwealth imposes a 1% transfer tax on the value of the real estate. However, Philadelphia imposes an additional 3.278% tax on the value of the deeded real estate for a combined rate of 4.278%. As a result, Philadelphia's real estate transfer tax is among the highest in Pennsylvania.

Montgomery County, Pennsylvania's transfer tax is only 1%. So, if you're looking to transfer property in the Philly area, you might want to start by talking with a real estate lawyer to ensure you're covered.

Percentage of Ownership Change Triggering the Transfer Tax

An ownership change of 75% or more triggers the transfer tax in Philadelphia. The county bases the tax on actual consideration paid, which includes any liens or encumbrances on the real estate.

It's important to note that the transfer tax applies not only to selling a property but also to changes in ownership in real estate by deed or other legal documents, including long-term leases.

You can get more details by visiting the City of Philadelphia's website.

Exemptions from the Philadelphia Real Estate Transfer Tax

Pennsylvania and Philadelphia provide exemptions from transfer taxes depending on the purpose and type of transaction and the parties involved.

However, the law may vary between Pennsylvania and the county. As a result, the Commonwealth may exclude some transactions from the transfer tax, while Philadelphia may not. So, it makes sense to talk with a real estate attorney familiar with the laws of each sector.

For instance, Pennsylvania's real estate transfer tax law excludes transfers between a stepparent and a step-child (including a step-child's spouse). But, on the other hand, Philadelphia's transfer tax doesn't.

Philadelphia transfer tax law excludes 28 transactions, while Pennsylvania transfer tax law excludes 34 transactions.

Common exclusions include:

transfers to an excluded party by gift or dedication
confirmation deeds
correctional deeds
transfers between certain relatives and specific nonprofits
transfers of co-op interest

However, such transactions must also meet specific requirements.

The Government is Excluded from Transfer Tax

Pennsylvania and Philadelphia, transfer tax laws exclude the federal, state, or local government or its agencies from tax for all transactions.

However, at times the party receiving the transfer may not be excluded, making them responsible for the transfer tax—for example, properties purchased at a sheriff's sale or from a state or local government agency.

Family Member Exclusions to the Tax

Pennsylvania and Philadelphia exclude tax transfer costs with transactions between certain family members, including:

Parent and child (including child's spouse)
Grandparent and grandchild (including the grandchild's spouse)
Siblings (including the sibling's spouse)
Husband and wife
Divorced spouses

None of these relationships include transfers between uncles/aunts, nieces/nephews, or cousins. In addition, although the tax transfer law excludes transfers between spouses, the transfer must be under a divorce decree.

Philadelphia explicitly excludes transfers between life partners that meet the requirements of a life partnership under the Philadelphia Code from real estate transfer tax.

However, while the Pennsylvania real estate transfer tax law does not explicitly list life partners, the law protects same-sex marriages under the definition of husband and wife.

Nonprofit Housing Exemptions from Transfer Tax

Philadelphia offers specific exemptions for transfers involving nonprofit housing corporations incorporated by the City to support affordable housing and nonprofits.

For example, Philadelphia excludes the imposition of real estate transfer tax on both parties when a party transfers to a nonprofit housing corporation, such as the Philadelphia Housing Authority.

In addition, the real estate transfer tax excludes transfers to and from nonprofit housing organizations that renovate properties and subsequently transfer the property to a person meeting specific income requirements.

However, the transfer cannot be to a for-profit entity or a person failing to qualify as having a low-to-moderate income.

These exclusions may be significant to real estate developers and nonprofit entities seeking to develop within Philadelphia.

Exemptions for Religious Organizations

Generally, the Philadelphia transfer tax excludes religious organizations and other nonprofit corporations. However, the exemption applies if the transferor has not used the property commercially.

Confirmation Deed Exclusions

Philadelphia and Pennsylvania, transfer tax laws exclude confirmation deeds. However, the deed must be made without consideration, previously recorded, and intended to confirm an ownership interest in a property.

A typical example includes a deed to confirm a party's ownership interest in a property held as a joint tenant with the right of survivorship with a party that has since deceased.

Similarly, Philadelphia and Pennsylvania laws exclude correctional deeds from real estate transfer tax if done solely to correct an error regarding the description of the parties or the property.

For tax exclusion, the corrective deed must:

Convey the same property interest as in the original deed
The parties must have treated the property interest expressed in the correctional deeds as that of the grantee
The parties, at no time since the original act, treated the property interest described in the original deed as that of the grantee.

Talk to an Experienced Real Estate Attorney

It's essential to understand that transfer taxes exist in residential and commercial property transactions. So, you may need to consult a real estate attorney near you to protect your interests. In addition, High Swartz offers various legal services to help clients with almost any legal issue, from real estate and business law to estate planning and family law.

The information above is general: we recommend you consult an attorney regarding your circumstances. The content of this information should not be considered legal advice or a substitute for legal representation.

Kevin Cornish | April 5, 2023

How do I Evict a Tenant?

If you’re a landlord, you might have faced this very real question: how do I evict a tenant? After all, it isn’t all that unusual to have an inconsiderate, messy, or possibly even dangerous tenant. So at some point, you may decide that it’s necessary to part ways and evict them from your property.

But here’s the catch. Evicting a tenant isn’t as easy as you might expect. For example, residential landlords are often surprised about the numerous requirements and the time it takes to evict. There’s also time and monetary costs to consider.

In Pennsylvania, the Landlord and Tenant Act governs the process. And strict compliance is vital to ensure that you evict a tenant legally. After reading this article, you may want to talk with a real estate attorney near you to cover all the bases. Our firm has years of experience assisting residential and commercial landlords in navigating their rights in Pennsylvania and the mid-Atlantic region.

Steps Required for Evicting Tenants

Although various jurisdictions may differ slightly, typically, the process for how to evict a tenant follows these steps:

Ensure you have appropriate grounds for an eviction
Serve an official written eviction notice to the tenant
Serve a summons and complaint if the tenant fails to comply
Attend a court hearing and judgment
Issuance of a writ of execution evicting the tenant
Gaining possession of the property

So, as you can see, the process can take some time, anywhere from a month to two months or more from start to completion.

Grounds for Evicting a Tenant

The first step in an eviction is determining the basis for the removal. Pennsylvania requires a landlord to comply with notice requirements. In addition, the notice must include the tenant’s violation prompting the eviction. And that violation must be a valid reason. There are plenty of factors in play currently due to the pandemic and it's fallout, so touching base with a real estate attorney would be prudent to get the latest information.

You have grounds to evict a tenant for any one of these violations:

Failure to Pay Rent

Unsurprisingly, the primary reason for an eviction notice is a tenant who fails to pay rent or does so habitually. In Pennsylvania, rent is late one day after due. A landlord can take steps to evict the tenant with a 10-Day Notice to Quit, giving them ten days to settle unpaid rent. If the tenant fails to pay after the notice to quit, a landlord can continue filing an eviction action.

Violations of the Rental Agreement

Pennsylvania allows a landlord to evict a tenant for violating written lease terms. For example, the tenant may have a pet or roommate prohibited by the lease agreement. In this case, the landlord presents a 15-Day Notice to Quit for tenants residing at the property for one year or less.

For tenants residing at the property for greater than one year, the landlord presents a 30-Day Notice to Quit.

In either case, the tenant must move out of the property within that timeframe. Otherwise, the landlord can file an action to evict them.

Illegal Activities

Landlords can give tenants a 10-Day Notice to Quit for performing illegal activities on the property. For example, if a tenant creates, distributes, or uses controlled substances. Or if police seize drugs from the tenant’s rental unit.

Other examples include using the property for gambling or prostitution. Landlords can also evict tenants for becoming a chronic nuisance or substantially damaging the property. Keeping records of dates and times and any police reports is important to strengthen your case.

Independent of sufficient cause, a landlord must wait for the tenant to commit some violation. Otherwise, the only remedy is to wait for their lease to expire.

It’s critical to note that the Landlord and Tenant Act require that the notice to quit be served personally to the tenant. That being said, you can post the notice on the principal building or the lease premises. However, you cannot deliver the notice to quit by mail. This is important information for landlords that may live out of town and don't have easy access to the property in question.

While typically expected, notice to quit isn’t always required. Sometimes tenants waive receipt for a notice to quit in the lease agreement. Make sure your lease agreements are up-to-date and signed is extremely important.

What Happens if the Tenant Fails to Leave?

It's likely that a tenant may fail to comply despite receipt of a notice to quit. Don't panic. In that case, the landlord must file a recovery of possession of real property action in the Magisterial District Court of the count where the property resides. Although you can file the action yourself, a real estate attorney has the experience to do so properly to avoid delays in eviction.

The court serves the tenant the action and sets a hearing date between seven and 15 days after the complaint’s filing.

On the hearing date, the landlord must appear in person and present their case to the judge. The tenant can also submit their claim.

Tenants can assert any number of defenses during the eviction process:

The landlord's allegations were false
The breach of the lease wasn’t severe
The complaint wasn’t reasonable
Improper serving of the notice
The landlord failed to remedy a condition of the property such as leaks, mold, or another dangerous issue
The eviction violates the Fair Housing Act - this could entail discriminating on the basis of race, color, religious creed, ancestry, age, sex, pregnancy/childbirth, national origin, familial status, and disability

However, if the court rules in the landlord’s favor, tenants typically have ten days to appeal the judgment.

In addition to judgment for possession of the property, the judge can enter judgment for outstanding rent due, damage to the property, and lawsuit costs. The judge may also award the landlord attorneys’ fees if the lease agreement allows for their recovery.

Order for Possession

Fifteen days after the judge’s decision, the landlord can request that the court issue an order for possession. Within 48 hours from receipt, a constable or sheriff must serve the order to the tenant.

That order states that the tenant must vacate the property ten days after service (15 days for a non-residential tenant). If the tenant has not left after that timeframe, the constable may forcefully evict the tenant from the property. After the constable delivers possession of the property, the landlord has legal possession.

Even after the constable delivers possession of the property, additional issues may arise if the tenant has left their personal property at the residence. Further, a tenant could delay the eviction if they file an appeal of the court’s decision.

Self-Help Evictions

In some instances, landlords take measures into their own hands. For example, they may change the lock or shut off utilities. So here’s a word of advice if you’re a landlord considering this approach – don’t do it.

Most states frown on landlords forcing tenants from the property. You can only evict a tenant following a successful lawsuit. Even then, only a sheriff or constable can evict the tenant.

More importantly, the tenant can ask for an injunction prohibiting their removal during the court action. In addition, they can sue you for damages plus violations. Finally, the court can grant the tenant the right to stay on the property.

Need to Evict Someone?

Landlords are often unaware of the numerous legal requirements to evict a tenant. However, if a landlord doesn’t follow the correct procedures and provide the proper notices, it can lead to redoing steps in the process.

Missteps can form a basis for a tenant to file an appeal, further delaying the landlord’s recovery of possession. Even worse, they could lead to the tenant suing the landlord.

You can learn more about your rights by reading the Consumer Guide to Tenant and Landlord Rights. Published in June 2022, the guide covers legal requirements and best practices for renting a property.

Ultimately, a real estate attorney well-versed in landlord-tenant law can provide cost-effective assistance so that the process proceeds as smoothly as possible.

Our law firm has offices in Bucks County and Montgomery County, PA. The Best Lawyers in America recognized 16 of our attorneys for 2023. So, you can count on our firm to deliver experienced representation for any legal issue.

For more information about landlord-tenant law, contact Kevin Cornish at (610) 275-0700 or by email at kcornish@highswartz.com.

The information above is general: we recommend you consult an attorney regarding your circumstances. This information is not legal advice or a substitute for legal representation.

Sean G. Livesey | March 30, 2023

Merging Property Lots in PA: What Municipalities and Landowners Should Know

A series of recent cases in Pennsylvania are highlighting the impact an enduring statutory zoning mechanism is having on some unsuspecting landowners across the Commonwealth. The following information is meant to educate Pennsylvania landowners and municipalities on Merger Doctrine basics and provides several strategies meant to avoid unwanted complications the Merger Doctrine is likely to create.

“Doctrine of Merger of Lots,” or “Merger Doctrine” as it is sometimes called, is a zoning principle, rooted in a preference for municipal efficiency and land conformity, that has emerged from a group of cases interpreting local merger ordinances. The Merger Doctrine can apply where adjacent, undersized lots are, or were at some point, owned by the same person who also may have intended to merge them. In certain municipalities, the nonconforming, undersized, adjacent lots may be deemed to have merged into a single, conforming lot when certain conditions are met…even without the consent of the property owner.

General Rule:

The Merger of Lots Doctrine generally applies in Pennsylvania when the following elements are satisfied:

The local governing body has adopted a merger provision;
Two or more lots adjacent (adjoining) are involved;
At least one of the lots is nonconforming with respect to the dimensional requirements of the applicable zoning code (i.e., undersized lots);
The lots are or were commonly owned after the local government adopted a merger provision;
There is a physical manifestation upon the land of the owner’s intent to merge the lots into one dimensionally conforming lot, or there is a failure on part of the landowner to manifest a clear intent to keep the lots separate.

When all the foregoing items are met, a municipality may consider the lots in question to have merged seemingly spontaneously. However, courts have found that a landowner may oppose a local government’s claim of “automatic” lot merger by negating one of these elements.

Strategies To Prevent Automatic Lot Merger:

1) "Physically" Keep the Properties Separate via trees, shrubs, or fencing – In a 1991 case, the Commonwealth Court held that mere common ownership of adjoining lots does not automatically establish a physical merger of those lots unless the common owner manifested an intent to keep the lots separate and distinct. Then, in a 1998 decision, the Commonwealth Court held that to establish a physical merger, there must be evidence of some overt, unequivocal physical manifestation thereof.

Still, courts may still act unpredictably with an evolving area of law such as the law of merger. To make clear the intent not to merge, a property owner can use physical barriers to keep the adjoining lots separate and distinct, such as trees or a fence. Abstract legal attributes, such as whether the property owner purchased the lots at the same time or whether the properties have separate deeds and separate tax identification numbers, do not suffice.

2) Look For a Merger Provision in the Local Ordinance – Consult your local ordinance to determine whether a merger provision has been adopted. Pennsylvania courts have consistently described the Merger Doctrine as being fundamentally a “creature of statute or ordinance,” not of common law, that only applies where a municipality has legislated a merger clause into the local code (e.g., Loughran v. Valley View Developers, Inc., a 2017 case). There is no merger provision in the Pennsylvania Municipalities Planning Code (MPC), so the provision must be locally enacted.

3) Look To the Timeline And Determine Whether the Lots Were Commonly Owned When the Merger Provision was Adopted – understanding the timing of ownership and the phrasing of the merger provision (if any) may be the key to preventing an automatic lot merger.

4) Check the Zoning History and Avoid Seeking Zoning Relief For a Single Property If, In Fact, Relief is Required For Multiple Lots – Courts have found past treatment of potentially merged property, including zoning applications (whether approved or denied) that refer to multiple lots as a single property, to be evidence of the owner’s intent to merge. See, e.g., in DiCicco v. City of Philadelphia. Of course, this factor would work against a landowner seeking to prove properties have not merged.

Ultimately, a real estate attorney well-versed in the law of merger of lots can provide cost-effective assistance to avoid common pitfalls so that a resolution can be reached as smoothly as possible.

Our law firm has offices in Bucks County and Montgomery County, PA. The Best Lawyers in America recognized 16 of our attorneys for 2023. So, you can count on our firm to deliver experienced representation for any legal issue.

For more information about the Merger Doctrine, contact real estate attorney Sean Livesey at (610) 275-0700.

This information is not legal advice or a substitute for legal representation.

Tom Gabor | August 31, 2022

William F. Kerr, Jr. named the Best Lawyers® 2023 Real Estate Litigation Lawyer of the Year in Philadelphia

High Swartz LLP is pleased to announce that real estate attorney William F. Kerr, Jr. has been recognized as the Lawyer of the Year in the Philadelphia Metro region for 2023. Best Lawyers® selects only one attorney in each legal service to represent a city's region. Mr. Kerr represents land developers, property managers, and owners in real estate matters including real estate tax assessments and various transactions.

Although this is his first recognition as Lawyer of the Year, Bill has been included in editions of Best Lawyers® in America since 2018, in multiple categories including Municipal Law. Kerr serves as a Zoning Board Solicitor and special zoning, development, and real estate tax counsel to several southeastern Pennsylvania municipalities. He also provides outside counsel on real estate matters to the Philadelphia International Airport.

Of special importance to Mr. Kerr is his work as a member of Habitat for Humanity of Montgomery and Delaware Counties Board of Directors. Habitat has helped thousands of our region's families build, repair and improve their homes, while assisting them in becoming financially stable.

Additionally, Bill represents numerous Pennsylvania affordable housing developers in various aspects of the affordable housing development process. These include properties financed with Federal Low Income Housing Tax Credits. Bill has been commended for his work with an affordable housing industry group that successfully pursued an amendment to Pennsylvania’s assessment law as it affects affordable housing.

Since it was first published in 1983, Best Lawyers^® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Almost 108,000 industry leading lawyers are eligible to vote (from around the world), and we have received over 13 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2023 Edition of The Best Lawyers in America^©, 9.4 million votes were analyzed, which resulted in more than 67,000 leading lawyers being included in the new edition. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor.

High Swartz | March 30, 2022

Sean G. Livesey Joins High Swartz LLP's Real Estate Practice Group

The firm is pleased to announce the addition of Montgomery County real estate attorney Sean G. Livesey to its Norristown law office.

Sean primarily focuses his practice on real estate matters, civil, and commercial litigation. He also has experience in zoning and land development, municipal code enforcement, real estate sales, and leasing.

Previously, Sean was a partner in his family practice in Conshohocken, PA, where he advised Philadelphia area startup companies regarding property acquisitions, business structure, and real estate tax liability. Sean also consulted with Montgomery County businesses to analyze zoning and land development proposals.

"High Swartz's real estate practice group shares my passion for representing developers and property owners while improving our communities in Greater Philadelphia. Joining Montgomery County's oldest law firm is an honor and I'm excited to contribute."

Prior to his private practice work, Sean was an associate at a large Philadelphia law firm’s commercial group where his practice included business litigation, real estate, zoning and land use. He represented real estate developers in Philadelphia, Montgomery County, Bucks County, and Delaware County. Sean also represented landlords in complex, large-scale landlord/tenant disputes.

As an associate at a large law firm in Virginia in 2018, Sean represented the claims administrator for the NFL Concussion Settlement in negotiating agreements with health systems to incorporate professionals into a diagnosing physicians network. Within the scope of the agreements, former players could be diagnosed with such neurodegenerative diseases as CTE, dementia, ALS, and Parkinson's.

Sean earned his J.D. at the University of Richmond's T.C. Williams School of Law while also obtaining his MBA at Richmond's Robins School of Business. After graduating, he served as a Judicial Intern for the Honorable Thomas N. O'Neill. Jr., United States District Judge for the Eastern District of Pennsylvania.

Sean grew up in Montgomery County, PA and enjoys cheering on Philly sports teams with his German shepherd, Zoe, a rescue from Memphis, TN.